M/s. Elgi Rubber Company Limited, Coimbatore.Report on the audit of Standalone Financial StatementsOpinion
1. We have audited the accompanying standalone financial statements of ELGI Rubber Company Limited (“the Company”), which comprise the standalone balance sheet as at 31st March 2026 and the standalone statement of Profit and Loss (including other comprehensive income), standalone statement of changes in equity, and the standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including material accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2026, and its loss and other comprehensive loss, changes in equity and its cash flows for the year then ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the “Standalone Financial Statements” section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on standalone financial statements.
Key Audit Matters:
4. Key audit matters are those matters that, in our professional judgment, were of the most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters:
S.No.
Key Audit Matter
Auditor’s Response
1.
Impairment of Investment, Loans and Receivables relating to the Step-down Foreign Subsidiary
One of the company’s wholly owned step-down foreign subsidiary, Rubber Resources B.V., Netherlands, entered into liquidation proceedings on 26th January 2026. Considering the financial position of the underlying entity and the uncertainties associated with the liquidation process, the Company assessed the recoverability of its investment, loans and receivables relating to the said step-down foreign subsidiary.
Based on this assessment, the Company has recognised a full impairment provision against the carrying value of the investment amounting to Rs. 363.84, loans amounting to Rs. 544.16 and receivables amounting to Rs. 253.61 million, during the year, in accordance with the applicable requirements of the relevant Indian Accounting Standards.
(Refer Note 38 and 56 to standalone financial statements)
This matter was considered to be a Key Audit Matter because of the materiality of the impairment recognised in the standalone financial statements and the significant management judgment involved in evaluating the recoverability of the investment and receivables, including consideration of the liquidation proceedings, expected recoveries, and the adequacy of the impairment recognised.
Our audit procedures included, among others:
• Obtaining an understanding of the circumstances leading to the liquidation of the step-down foreign subsidiary and evaluating the impact of the liquidation on the Company’s investment and receivables.
• Assessing the design and implementation of relevant controls over management’s impairment assessment process.
• Evaluating management’s assessment of recoverability of the investment, loans and receivables with reference to the status of the liquidation proceedings and available information regarding expected recoveries.
• Examining the basis and methodology adopted by management for recognising full impairment provision and evaluating whether the accounting treatment was in accordance with the applicable Indian Accounting Standards.
• Testing the mathematical accuracy of the impairment computation.
• Assessing the adequacy and appropriateness of the disclosures made in the standalone financial statements relating to the impairment and the liquidation of the step-down foreign subsidiary.
2.
Evaluation of uncertain tax positions
The Company has uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes (Refer note 46 to standalone financial statements).
We considered the evaluation of uncertain tax positions as a key audit matter, considering its significance of its impact to the Standalone Financial Statements, and where applicable, the judgement involved in evaluating the uncertain tax positions.
Our audit procedures included the following:
• Obtained details of completed tax assessments and demands received upto the end of the financial year and till the date of finalisation of our report, from management.
• Analysed the management’s underlying assumptions in estimating the tax provision and the possible outcome of the disputes.
• Considered legal precedence and other rulings in evaluating management’s position on these uncertain tax positions.
• Additionally, we considered the effect of new information in respect of uncertain tax positions to evaluate whether any change was required to management’s position on these uncertainties.
information Other than the standalone Financial Statements and Auditor’s Report Thereon
5. The Company’s Management and Board of Directors are responsible for the other information. The other information comprises the Board’s Report and the Corporate Governance Report but does not include the standalone financial statements and our auditor’s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
Management’s Responsibility for the Standalone Financial Statements:
6. The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting standards specified under section 133 of the Act, read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for the safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation, and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statement that gives a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
7. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
We give in “Annexure A” a detailed description of Auditors; responsibilities for the Audit of the Standalone Financial Statements.
Report on Other Legal and Regulatory Requirements
8. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of subsection (11) of section 143 of the Companies Act, 2013, we give in the “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The standalone balance Sheet, the standalone statement of Profit and Loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of Cash Flows dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on 31st March 2026 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2026 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure C”.
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion, and to the best of our information and according to the explanations given to us:
• The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 46 to the financial statements;
• The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
• There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
(h) (A) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or
invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:
o directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Company or
o provide any guarantee, security, or the like to or on behalf of the Ultimate Beneficiaries.
(B) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall:
• directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Funding Party or
• provide any guarantee, security, or the like from oron behalf of the Ultimate Beneficiaries; and
(C) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused me to believe that the representations under subclause (i) (A) and (i) (B) contain any material misstatement.
(i) The Company has not declared or paid any dividend during the year and has not proposed final dividend for the year.
(j) Based on our examination which included test checks, the Company has used accounting software for maintaining its books of account, which have a feature of recording audit trail (edit log) facility the same has operated throughout the year for all relevant transactions recorded, except in respect of maintenance of books of accounts of the retreading division of the company, wherein the accounting software did not have the audit trial feature throughout the year.
Further, during the course of our audit, we did not come across any instance of the audit trail feature being tampered with, in respect of accounting software, for the period for which the audit trail feature was operating and the audit trail has been preserved by the Company as per the statutory requirements for record retention (except for the retreading division of the company, for which the audit trail feature was not operating).
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which is required to be commented upon by us.
for M/s ARUN & CO Chartered Accountants Firm Registration No.0014464S
CA. A. Arun Partner
Place : Coimbatore Membership n°. 227831
Date : May 28, 2026 UDIN:26227831MWISTC3026